Size/Growth of the casual games industry (and the portals)

Discussion in 'Development & Distribution' started by Phil Steinmeyer, Dec 21, 2005.

  1. Phil Steinmeyer

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    #1 Phil Steinmeyer, Dec 21, 2005
    Last edited: Dec 21, 2005
  2. Stu

    Stu
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    Good reads, thanks.

    As if the data pertaining to sales of casual games through major portals wasn't hard enough to come by, how could one even come close to factoring in sales of casual games direct from the sites of small developers? What percent of the market share is running through the portals versus direct sales? Is it significant or a drop in the bucket? I would think that all those direct sales would indeed be significant enough to account for.

    I would wonder the same in regards to market share versus the size of the portals. Of course there are those few giants who dominate but there must be hundreds of medium to small portals who do a fair amount of business if you combine all of their sales.
     
  3. Phil Steinmeyer

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    I fixed the links on the graphs, so if you viewed this earlier and so no pictures/graphs, please try again.

    I have yet to see a royalty report, so I can't be sure, but I've heard that the collective value of the smaller sites (outside of the top 5 to 15 sites) is pretty low, in terms of sales. I'd guess < 5%.

    A developer's home site can, in some cases, account for a significant number of sales. But for portal-oriented games, I'd imagine it's 5-35% in most cases.
     
  4. Sillysoft

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    It's pretty much impossible to ever get the real figure for the percentage that all the smaller sites account for. I suspect it's higher then 5% though. I think this is a case where the long tail applies. There are hundreds (thousands?) of developer sites, regnow affiliates, reflexive affiliates, etc out there on the web. Even if they're all very small, adding them all together could account for a decent overall proportion.
     
  5. goodsol

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    Heard from whom? The portals? The portals have a vested interest in making people think that you can't make money outside of the portals.

    My sense is that the people who have totalled up these numbers are talking out of their butts. They have no idea and they aren't looking at the smaller sites or as sillysoft notes, the long tail.

    When you are talking about total numbers as low as $80 million, the small sites matter. I know that it takes very few (and I mean very few) of the small sites added together to start to get annual numbers in the millions. And there are many small non-portal sites that do significant business (6 figures or better), so that alone gets you well up into the millions before you even start counting the hundreds and hundreds of smaller sites.

    I suspect that these numbers are underestimating the total size of the market and overestimating the market share of the portals.
     
  6. Phil Steinmeyer

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    I heard from two different sources that weren't portals that aggregate sales from the 'minor' sites are quite small. But then, both of those sources made portal friendly games. If you have a game that is a bit more niche, then you might not do so well on the portals but might do very well on smaller 3rd party sites.
     
  7. James C. Smith

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    I would think that in many cases a developer’s own web site would generate more than the "aggregate sales from the 'minor' sites". It really depends on the type of game and the developer’s ability to market it. In cases with strong niche markets, or lucky breaks, a developer can do a lot of direct sales. It is also easier for these direct sales to be a significant percentage if the game was a flop on the portals.

    My point is, when you are talking about “sales other than the top 5 major portalsâ€￾, you are not really talking about all the minor sites. You are talking about the developer’s own site which can be much bigger (for him) than all the minor sites.
     
  8. James C. Smith

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    Although, much of what I said is really more related to “indieâ€￾ games than “casualâ€￾ games and I guess you are talking about casual games here. Sorry.
     
  9. jonathan GT

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    I agree with this statement. Take into account that over 50% of people on the web play games - and casual games are positioned perfectly for the majority of these people who like to play games in small chunks - and the big guys (Real, Shockwave and the like) are really only reaching a small portion of the potential and future casual games market. IMO, the 'long tail' will reach an accumulative market much larger than Real or others can ever reach.

    Of course, I'm considering multiple revenue streams here for casual games- downloads, advertising, subscriptions, skill-gaming, etc.
     
  10. soniCron

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    I think it's silly to focus on how large a market is without identifying how many players are in the game. I just hope the readers of this thread acknowledge that the "long tail" is of little benefit to the developer, and really only helps the retailer in the long run.
     
  11. tentons

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    But what if the developer is also the retailer? :)
     
  12. soniCron

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    Then you'd have to have a large enough catalog to even have a "long tail," and by that point you'd be a retail who also develops games. (Primary vs. Secondary)
     
  13. jonathan GT

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    You raise a good point - the retailers will reap the majority of the benefit of the long tail. But IMO, generally speaking, if developers would more aggressively seek a revenue share of something other than downloads (advertising, for example) they could reap the benefit of the thousands of smaller game sites that receive a good amount of traffic but no game sales.

    I would argue that this will become a neccesity, in fact - the rise of broadband penetration and the increasing complexity and budgets of download titles will continue to make it harder for casual and indie developers to survive. Online games and the alternative revenue streams they generate will become more and more relevant as the casual market matures. The kids coming out of college now spend their entire lives online - so it will be almost foolish to take them offline with a download in the future...

    Anyway, just my 2 cents...
     
  14. Anthony Flack

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    I'm thinking it's the consumer who benefits most of all. Which is excellent, because I'm a consumer too.
     
  15. arcadetown

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    A decline in Alexa rank <> a decline in traffic. We've slid some ranking wise yet traffic and sales are up very nicely. Other webmasters report the same. Why? There's an explosion of new users and new types of things to do online. New genre sites exploding into high alrexa rankings push the previous top genres down the ranks. Witness myspace.com or break.com (previously big-boys.com) to name a couple. Casual games has just scratched the surface and has a lot of undiscovered country to grow into.

    Very much agree. People always put on some crazy blinders thinking the self proclaimed top portals are it. False! The long tail is one part but what about some other solid sized sites such as ArcadeTown, Miniclip, or Runescape just to name a few. In fact why is a casual game always qualified as X? Surely games like Runescape or Adventure Quest are casual yet there's always some bs reason why they are not. If so why were people running some of those speakers at the last Casual Games Conference?

    Runescape generates #s that would easily compete with some self proclaimed top casual games sites. Not to mention the tons of revenue generated that is ignored such as advertising on sites like AddictingGames. If you take off those crazy blinders I bet the "casual" games market is already a $1 BIL industry!
     
  16. Jack Norton

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    Also, alexa only counts traffic. Generic traffic. Everyone knows that is much better 10 targeted visitors than 1000 generic.
     

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